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Monopar Therapeutics(MNPR) - 2025 Q2 - Quarterly Report

Forward-Looking Statements This section outlines the inherent risks and uncertainties associated with forward-looking statements in the report - This Quarterly Report on Form 10-Q contains forward-looking statements, identified by terms like "hopes," "believes," and "expects," which are subject to various risks and uncertainties that could cause actual results to differ materially from those expressed or implied6 - Key uncertainties include the ability to raise sufficient funds, find pharmaceutical partners, risks in R&D activities, regulatory approval timelines, supply chain challenges for radioisotopes, market uptake, intellectual property, personnel retention, and macroeconomic factors like inflation and geopolitical conflicts7 Summary Risk Factors This section highlights the company's financial losses, program uncertainties, and significant operational risks - The company is a clinical-stage biopharmaceutical company with a history of financial losses, expecting continued significant losses and may never achieve or maintain cash self-sufficiency or profitability11 - Although ALXN1840 met its primary endpoint in a pivotal Phase 3 trial, Alexion Pharmaceuticals, Inc. terminated the program based on Phase 2 mechanistic trial results and regulatory discussions, leading to uncertain outcomes for Monopar's NDA submission11 - Significant risks include the lengthy and uncertain regulatory approval process, dependence on marketing approvals, potential delays in clinical trials, manufacturing challenges, reliance on third parties, the novelty of radiopharmaceutical technology, geopolitical events, market volatility, intense competition, and intellectual property protection1113 Part I FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and related disclosures Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the company's financial position, performance, and significant accounting policies for the periods ended June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $39,501,936 | $45,816,289 | | Total current assets | $53,747,703 | $60,291,071 | | Total assets | $53,865,873 | $60,291,071 | | Total current liabilities | $1,583,613 | $5,254,300 | | Total liabilities | $1,663,979 | $5,254,300 | | Total stockholders' equity | $52,201,894 | $55,036,771 | | Accumulated deficit | $(80,871,134) | $(75,792,636) | - Total assets decreased by $6,425,198 (10.7%) from December 31, 2024, to June 30, 2025, primarily due to a reduction in cash and cash equivalents16 - Total stockholders' equity decreased by $2,834,877 (5.2%) from December 31, 2024, to June 30, 2025, mainly driven by the increase in accumulated deficit16 Condensed Consolidated Statements of Operations and Comprehensive Loss This section details the company's revenues, expenses, and net loss over specific reporting periods | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $1,730,000 | $1,130,978 | $3,373,375 | $2,097,088 | | General and administrative | $1,504,295 | $657,806 | $3,082,737 | $1,415,087 | | Total operating expenses | $3,234,295 | $1,788,784 | $6,456,112 | $3,512,175 | | Loss from operations | $(3,234,295) | $(1,788,784) | $(6,456,112) | $(3,512,175) | | Interest income | $780,769 | $73,475 | $1,377,614 | $155,640 | | Net loss | $(2,453,526) | $(1,715,309) | $(5,078,498) | $(3,356,535) | | Basic and diluted net loss per share | $(0.35) | $(0.49) | $(0.73) | $(1.00) | - Research and development expenses increased by $599,023 (53%) for the three months and $1,276,287 (61%) for the six months ended June 30, 2025, compared to the same periods in 202420 - General and administrative expenses increased by $846,489 (129%) for the three months and $1,667,650 (118%) for the six months ended June 30, 2025, compared to the same periods in 202420 Condensed Consolidated Statements of Stockholders' Equity This section outlines changes in the company's equity accounts, including common stock and accumulated deficit | Metric | Balance at January 1, 2025 | Balance at June 30, 2025 | | :------------------------- | :------------------------- | :------------------------- | | Common Stock (Amount) | $6,103 | $6,127 | | Additional Paid-in Capital | $130,787,312 | $132,989,324 | | Accumulated Deficit | $(75,792,636) | $(80,871,134) | | Total Stockholders' Equity | $55,036,771 | $52,201,894 | - Total stockholders' equity decreased from $55,036,771 at January 1, 2025, to $52,201,894 at June 30, 2025, primarily due to net losses24 - Stock-based compensation, net, contributed $2,634,563 to additional paid-in capital during the six months ended June 30, 202524 Condensed Consolidated Statements of Cash Flows This section presents the cash inflows and outflows from operating, investing, and financing activities | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(6,740,687) | $(3,332,221) | | Net cash provided by (used in) investing activities | $861,466 | $(985,730) | | Net cash (used in) provided by financing activities | $(432,527) | $3,171,962 | | Net decrease in cash and cash equivalents | $(6,314,353) | $(1,146,149) | | Cash and cash equivalents at end of period | $39,501,936 | $6,119,931 | - Net cash used in operating activities increased by $3,408,466 (102%) for the six months ended June 30, 2025, compared to 2024, primarily due to a higher net loss and a $3 million payment related to ALXN184031174 - Net cash provided by investing activities increased by $1,847,196 in 2025 compared to 2024, shifting from a net outflow to a net inflow, mainly due to investment maturities31175 - Net cash provided by financing activities decreased by $3,604,489 in 2025 compared to 2024, shifting from a net inflow to a net outflow, due to the absence of common stock sales under at-the-market programs in 202531176 Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements Note 1 – Nature of Business and Liquidity This note describes the company's core business, product pipeline, and current liquidity position - Monopar Therapeutics Inc. is a clinical-stage biopharmaceutical company developing ALXN1840 for Wilson disease and novel radiopharmaceuticals (Phase 1-stage MNPR-101-Zr, Phase 1a-stage MNPR-101-Lu, and late preclinical-stage MNPR-101-Ac225) for oncology33 - The company has an accumulated deficit of approximately $80.9 million as of June 30, 2025, and has not generated any revenue since inception35 - Management estimates that currently available cash will provide sufficient funds to meet obligations through at least December 31, 2026, but future funding is uncertain35 Note 2 – Significant Accounting Policies This note details the key accounting principles and methods used in preparing the financial statements - The financial statements are prepared in accordance with U.S. GAAP, including all normal, recurring adjustments, and the company's functional currency is the U.S. Dollar404143 - Research and development costs are expensed as incurred, and in-process research and development (IPR&D) expenses, including upfront license fees like the $4 million cash and $4.6 million stock for ALXN1840, are expensed as goods are received or services rendered6566 - Stock-based compensation is accounted for using a fair value method, recognizing expense for stock options (Black-Scholes model) and restricted stock units (closing stock price) on a straight-line basis7779 - The company operates as a single reportable segment, with financial performance assessed primarily using net loss and internal budget/cash forecast models82 Note 3 – Cash Equivalents and Investments This note provides a breakdown of the company's cash equivalents and held-to-maturity investments | Category | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :----------------------- | :--------------------------- | :----------------------------- | | Cash equivalents | $39,327,275 | $45,531,646 | | Held-to-maturity investments (Amortized Cost) | $13,748,473 | $14,395,913 | - As of June 30, 2025, cash equivalents consisted of money market accounts and U.S. Treasury securities with maturities of three months or less85 - Held-to-maturity investments (U.S. Treasury securities) had a combined book value of $13.7 million as of June 30, 2025, and $14.4 million as of December 31, 202489 Note 4 – Capital Stock This note describes the company's common stock, reverse stock split, and outstanding warrants - A 1-for-5 reverse stock split became effective on August 12, 2024, reducing the number of outstanding shares from 17,601,827 to 3,520,427 to regain Nasdaq compliance9597 - As of June 30, 2025, the company had 6,127,457 shares of common stock issued and outstanding102 - 882,761 pre-funded warrants were outstanding as of June 30, 2025, classified as a component of stockholders' equity and immediately exercisable at a de-minimis exercise price of $0.001 per share103105106 Note 5 – Stock Incentive Plan This note details the company's stock incentive plan, option grants, and stock-based compensation expense - The 2016 Stock Incentive Plan's award pool was increased to 1,420,000 shares107 - During the six months ended June 30, 2025, 225,881 stock options were granted with exercise prices ranging from $22.00 to $44.96 per share, and 120,941 restricted stock units were granted108114 - The company recognized $2,630,701 in total stock-based compensation expense for the six months ended June 30, 2025 ($1,422,615 as G&A and $1,208,086 as R&D)116 Note 6 – Related Party Transactions This note discloses any transactions or relationships with related parties - Tactic Pharma, the company's initial investor, beneficially owned 13.4% of Monopar's common stock as of June 30, 2025118 - No transactions occurred between Tactic Pharma and Monopar during the three and six months ended June 30, 2025118 Note 7 – Net Loss Per Share This note explains the calculation of basic and diluted net loss per common share | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(2,454) | $(1,715) | $(5,078) | $(3,357) | | Weighted-average common shares outstanding | 6,998 | 3,503 | 6,993 | 3,349 | | Net loss per common share, basic and diluted | $(0.35) | $(0.49) | $(0.73) | $(1.00) | - Basic and diluted net loss per common share was $(0.35) for the three months and $(0.73) for the six months ended June 30, 2025120 - Potentially dilutive securities, including 627,000 stock options and 128,000 unvested restricted stock units for the six months ended June 30, 2025, were excluded from the diluted EPS calculation as their effect was anti-dilutive120 Note 8 – Commitments and Contingencies This note outlines the company's contractual obligations, milestone payments, and lease liabilities - Under the Alexion License Agreement for ALXN1840, Monopar is obligated to pay up to $94.0 million in regulatory approval and sales milestones, plus tiered royalties ranging from 10% to 20% on net sales122 - Monopar acquired full ownership of its MNPR-101 radiopharmaceutical platform from NorthStar and will jointly share ownership of a patent application on the use of PCTA as a linker with Ac-225124 - Under the XOMA Ltd. license for MNPR-101 humanization technology, Monopar is to make potential milestone payments up to $14.925 million upon achievement of certain clinical, regulatory, and sales milestones, with the first payment due upon first dosing in a Phase 2 clinical trial125 - As of June 30, 2025, total operating lease liabilities were $113,740, with a weighted-average remaining lease term of 1.67 years and a discount rate of 6.50%129 Note 9 – Subsequent Events This note reports significant events that occurred after the balance sheet date - On June 6, 2025, Alexion Pharmaceuticals officially transferred sponsorship of the investigational new drug (IND) application for ALXN1840 to Monopar, with FDA acknowledgment on July 29, 2025133 - Monopar is now fully responsible for the ALXN1840 program, including its commercial advancement and compliance with all applicable federal regulations133 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, results of operations, and future outlook, highlighting its clinical-stage pipeline, funding status, strategic goals, and critical accounting policies Overview This section provides a high-level summary of the company's biopharmaceutical pipeline and development focus - Monopar Therapeutics is a clinical-stage biopharmaceutical company developing ALXN1840 for Wilson disease and radiopharmaceutical programs (Phase 1-stage MNPR-101-Zr, Phase 1a-stage MNPR-101-Lu, and late preclinical-stage MNPR-101-Ac225) for advanced cancers135 Financial Status This section details the company's current cash position, funding outlook, and recent capital raises - Cash, cash equivalents, and investments totaled $53.3 million as of June 30, 2025136 - Current funds are expected to be sufficient through at least December 31, 2026, to support the ALXN1840 NDA filing, advancement of MNPR-101 radiopharmaceutical programs, and investment in internal R&D projects136 - The company raised approximately $17.8 million net proceeds from a public offering in October 2024 and $37.4 million net proceeds from a public offering and private placement of pre-funded warrants in December 2024138139 Our Product Pipeline This section describes the development status of ALXN1840 and the MNPR-101 radiopharmaceutical programs - ALXN1840 for Wilson disease, an investigational once-daily oral drug, met its primary endpoint in a pivotal Phase 3 trial, demonstrating three-times greater copper mobilization compared to standard-of-care142144 - Alexion terminated the ALXN1840 program based on Phase 2 mechanistic trial results, not safety signals; Monopar is now preparing to submit an NDA to the FDA in early 2026146148 - Monopar's MNPR-101 radiopharmaceutical programs include a Phase 1 imaging and dosimetry clinical trial with MNPR-101-Zr (launched April 2024) and a Phase 1a therapeutic clinical trial of MNPR-101-Lu (launched October 2024), with an Expanded Access Program authorized by the FDA149151 Our Strategy This section outlines the company's strategic goals for drug development, commercialization, and pipeline expansion - Monopar's strategic goal is to acquire, develop, and commercialize innovative treatments for patients with unmet medical needs153 - Key strategic elements include assembling a regulatory package for ALXN1840's NDA, advancing MNPR-101 radiopharmaceutical programs, and expanding the drug development pipeline through internal efforts, in-licensing, and acquisitions157 - The company leverages its management team's extensive experience in asset acquisition, drug development, and commercialization, with prior successes including four drug approvals and three diagnostic medical imaging device approvals153157 Revenues This section clarifies the company's current revenue status and future expectations as a clinical-stage entity - As a small-cap biopharmaceutical company, Monopar has no approved drugs and has not generated any revenues to date155 - The company does not anticipate revenues from operations until product development is complete, marketing approval is obtained, or drug candidates are out-licensed or sold155 Critical Accounting Policies and Use of Estimates This section discusses key accounting policies requiring significant management judgment and estimation - Critical accounting policies include clinical trial accruals, where costs for third-party activities are expensed based on estimates of work completed and agreed-upon fees159 - Stock-based compensation is accounted for using a fair value method, requiring judgment in estimating future stock price volatility and expected holding terms for stock options and RSUs160161 Results of Operations This section analyzes the company's financial performance, including changes in expenses and net loss | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Variance (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Variance (6M) | | :--------------------------------- | :--------------------------- | :--------------------------- | :------------ | :--------------------------- | :--------------------------- | :------------ | | Research and development expenses | $1,730 | $1,131 | $599 | $3,373 | $2,097 | $1,276 | | General and administrative expenses | $1,504 | $658 | $846 | $3,083 | $1,415 | $1,668 | | Total operating expenses | $3,234 | $1,789 | $1,446 | $6,456 | $3,512 | $2,944 | | Operating loss | $(3,234) | $(1,789) | $(1,446) | $(6,456) | $(3,512) | $(2,944) | | Interest income | $781 | $73 | $707 | $1,378 | $156 | $1,222 | | Net loss | $(2,454) | $(1,715) | $(738) | $(5,078) | $(3,357) | $(1,723) | - R&D expenses increased by $599,023 (53%) for the three months and $1,276,287 (61%) for the six months ended June 30, 2025, primarily due to increased personnel expenses163164 - G&A expenses increased by $846,489 (129%) for the three months and $1,667,651 (118%) for the six months ended June 30, 2025, driven by higher Board compensation, personnel expenses, and legal fees165166 - Interest income significantly increased by $707,294 (963%) for the three months and $1,221,974 (785%) for the six months ended June 30, 2025, due to higher bank balances and U.S. Treasury securities from funds raised in Q4 2024167168 Liquidity and Capital Resources This section assesses the company's cash position, funding needs, and potential future financing strategies - The company has an accumulated deficit of approximately $80.9 million as of June 30, 2025, and expects to continue incurring losses for the foreseeable future170 - Currently available funds are anticipated to fund planned operations through at least December 31, 2026, but substantial additional long-term funding will be required for future operations, including product development and commercialization170178182 - Future financing may involve equity offerings, debt financings, strategic collaborations, or grant funding, which could dilute current stockholders' ownership or impose restrictive covenants183 | Six Months Ended June 30, | 2025 | 2024 | Variance | | :--------------------------------------- | :----- | :----- | :------- | | Net cash used in operating activities | $(6,741) | $(3,332) | $(3,408) | | Net cash provided by (used in) investing activities | $861 | $(986) | $1,847 | | Net cash (used in) provided by financing activities | $(433) | $3,172 | $(3,604) | | Net decrease in cash and cash equivalents | $(6,314) | $(1,146) | $(5,168) | Contractual Obligations and Commitments This section details the company's significant contractual obligations, including milestone payments and lease liabilities - Under the Alexion License Agreement for ALXN1840, Monopar is obligated to pay up to $94.0 million in regulatory approval and sales milestones, plus tiered royalties of 10% to 20% on net sales186 - Monopar has potential milestone payments up to $14.925 million to XOMA Ltd. for MNPR-101 humanization technology, with the first payment due upon first dosing in a Phase 2 clinical trial189 - The company has lease obligations for its executive headquarters ($3,580/month for 36 months) and a small wet laboratory space ($1,000/month, cancellable after 6 months)191 Item 4. Controls and Procedures The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. There have been no material changes in internal control over financial reporting during the three months ended June 30, 2025 - The CEO and CFO evaluated and concluded that the company's disclosure controls and procedures were effective as of June 30, 2025197 - There have been no material changes in internal control over financial reporting during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting199 Part II OTHER INFORMATION This section covers additional disclosures including risk factors, other information, and exhibits Item 1A. Risk Factors There have been no material changes to the risk factors previously described in the company's Annual Report on Form 10-K filed with the SEC on March 31, 2025 - No material changes in information regarding risk factors have occurred since the Annual Report on Form 10-K filed on March 31, 2025200 Item 5. Other Information During the quarter ended June 30, 2025, no non-employee director or officer of the company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" - No non-employee director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025201 Item 6. Exhibits This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications from the CEO and CFO, and Inline XBRL documents - Exhibits filed include certifications from the Chief Executive Officer (31.1) and Chief Financial Officer (31.2, 32.1)203 - Inline XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, Presentation Linkbase, and Cover Page Interactive Data File are also filed203 Signatures This section formally concludes the report with the required executive signatures and filing date - The report was signed on August 12, 2025, by Chandler D. Robinson, Chief Executive Officer, and Quan Vu, Chief Financial Officer207